Canadian consumers showed skepticism toward the widespread early adoption of the Bank of Canada’s (BOC) concept of a digital dollar.
The Canadian central bank conducted research to identify consumers’ changes in preferences for payments, aimed at preparing for the development of an in-house central bank digital currency (CBDC).
The BOC’s research paper released on Oct. 28 reaffirmed Canadians’ long-standing affinity toward traditional, fiat-based payment systems despite growing support for a digital Canadian dollar.
Spectrum of user segment positions on adoption. Source: Bank of Canada
According to a Bank of Canada survey from July, Canadians strongly prefer cash and card payments for day-to-day purchases. Less than 3% of Canadians have used Bitcoin (BTC) or other cryptocurrencies for day-to-day payments since 2022.
Interest in CBDC does not translate to adoption
Still, 42% of the participants in the survey had favorable initial impressions of a hypothetical digital Canadian dollar, while only 20% “disliked” or “hated” the idea. The remaining 38% either took a neutral stance or revealed a lack of understanding of the technology.
The opportunity paradox: Users with high payment challenges may be late adopters of a hypothetical Digital Canadian dollar. Source: Bank of Canada
While the survey participants were open to CBDC issuance as a way to address limitations of fiat-based payments, such “interest does not necessarily translate to adoption,” the report noted.
Participants said a digital dollar would need to “demonstrate flawless reliability from day one” for widespread early adoption. Other preferences included ease of use, personal information privacy, security of transaction data, convenience and superior user experiences.
Most participants indicated that offline functionality was not critical for adoption, saying they would prefer cash during emergencies.
Canadians need CBDC to outperform the cash system
In addition to developing a better payment system, the Bank of Canada sees a need for significant investment and an awareness campaign to drive the adoption of a digital Canadian dollar.
Related: CBDCs and crypto should coexist, not compete — CoinDCX co-founder
The Canadian central bank recently said that it is “scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development.”
Australia and Colombia have also halted plans to launch their respective in-house CBDCs.
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